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Good morning and welcome back. We’ll update you on developments in the Middle East, and here’s what else we’re covering:
Tesla launches its first robotaxi service
Vanguard’s fixed income push into Europe
The ‘Kirklandisation’ of legal services
Donald Trump has raised the prospect of “regime change” in Iran after US military aircraft joined Israel’s campaign and bombed nuclear facilities in the country, drawing America into another Middle East war. Here’s what we know.
Donald Trump’s Truth Social posts: In a burst of social media posts overnight, the US president hailed the return of B-2 bombers to Missouri after they struck three nuclear sites in Iran. He said the damage to the sites in Fordow, Natanz and Isfahan was “monumental” and floated a scenario where the government in Tehran might collapse. “It’s not politically correct to use the term, ‘Regime Change,’ but if the current Iranian Regime is unable to MAKE IRAN GREAT AGAIN, why wouldn’t there be a Regime change???,” Trump wrote. “MIGA!,” he added.
Trump’s comments directly contradicted those of his vice-president JD Vance, who told NBC yesterday: “Our view has been very clear that we don’t want a regime change. We do not want to protract this or build this out any more than it’s already been built out.” He added: “We want to end their nuclear programme, and then we want to talk to the Iranians about a long-term settlement.”
How has Iran reacted? Iran’s top military commander said his forces were entitled to retaliate against US interests after Washington struck the Islamic republic. Major General Abdolrahim Mousavi said the US strikes meant his forces “are fully authorised to take any action against the US military and its interests, and we will never retreat from these steps”. Iran’s Supreme Leader Ayatollah Ali Khamenei faces the most consequential decision of his almost 40 years in power. Does he look for a diplomatic compromise with Trump, seek to escalate or try to keep the conflict contained to Israel?
What’s been the reaction elsewhere: Brent crude, the international oil benchmark, rose as much as 5.7 per cent to $81.40, a five-month high, before paring gains to trade up 0.8 per cent at $77.63 in London this morning. British Airways and Singapore Airlines cancelled flights to Dubai after the US strikes on Iran. More than 150 carriers, including Air France-KLM, American Airlines and Japan Airlines, have now suspended flights in the region after airspace over Israel, Iraq and Jordan was closed because of the war between Israel and Iran. Capitals across the Gulf, meanwhile, have been shaken by Trump’s decision to launch military action after rolling out the red carpet for the US president just a few weeks ago.
What’s next? US officials said there were no plans for further attacks unless Iran hit back. Trump will chair a national security meeting later today after the biggest gamble of his combined four and a half years in office. Iran’s foreign minister Abbas Araghchi travels to Moscow today where he will meet Russian President Vladimir Putin, one of Tehran’s closest allies. Iran’s exiled crown prince, Reza Pahlavi, holds a press conference in Paris. Israel has signalled it will press on with its bombing raids against Iran.
Follow our live blog for the latest updates, and we have more analysis on the conflict:
Inside Operation Midnight Hammer: How the US used stealth and decoys to launch a surprise attack on Iran.
Where is Iran’s uranium? US and Israeli attacks hit key nuclear sites but questions remain over Iran’s stash of enriched material.
In maps: Iran’s three nuclear sites targeted by US bombers.
Gideon Rachman: Tehran’s grand strategy has failed, but that is no guarantee Israel and the US can succeed, writes our chief foreign affairs commentator.
Join our subscriber-only webinar on Wednesday with FT journalists and guests and put your questions about the conflict to our panel. Register here. And here’s what else we’re keeping tabs on today:
Federal Reserve: Michelle Bowman, vice-chair for supervision at the US central bank, speaks about monetary policy and banking at the 2025 International Journal of Central Banking annual conference, in Prague. Austan Goolsbee, president of the Chicago Fed, participates in a moderated question-and-answer session at the Milwaukee Business Journal Mid-Year Outlook 2025.
The FT will hold a special online webinar today on the Trump administration’s efforts to reindustrialise the US and its focus on reshoring as the country’s industrial strategy enters a new phase. Register for free.
Five more top stories
1. Tesla’s robotaxi service launched yesterday in the company’s home city of Austin, Texas, involving about 10 vehicles, each with a human safety driver on board, amid regulatory scrutiny of the company’s self-driving technology. Chief executive Elon Musk has touted the self-driving taxis as the future of his flagging electric-car maker.
2. Vanguard, the world’s second-largest asset manager, is cutting fees on almost half of its bond exchange traded funds in Europe as part of a push into the fixed income market and as competition among the biggest fund providers heats up. Vanguard estimates the total savings for investors will amount to about $3.5mn annually. Read more about the changes.
3. Twenty-two people were killed and 63 injured when a suicide bomber blew himself up inside a packed church in Damascus, marking the first major security incident in the Syrian capital since the regime of Bashar al-Assad was toppled last December. The Syrian government said jihadi group Isis was responsible for the attack.
4. Japan’s ruling party has suffered its worst result in local assembly elections in Tokyo, as residents of the capital used the vote to protest against soaring food prices and low wage growth. The results of Sunday’s poll underscored the challenge Prime Minister Shigeru Ishiba could face next month in elections for the upper house of Japan’s national parliament.
5. Revolut’s chief executive is in line for a multibillion-dollar windfall if he more than triples the company’s current valuation to about $150bn. People familiar with the matter say Nik Storonsky, who founded the fintech in 2015, would see his stake increase significantly under a long-standing Elon Musk-style pay deal.
News in-depth
Decades ago, long before it was a private-equity powerhouse, the law firm Kirkland & Ellis was a pioneer of a model that overturned a long-standing norm in the legal industry. The Chicago-founded firm promoted lawyers to partners without giving them an ownership stake in the business. The model has been widely copied across the industry in a sign of how comprehensively the rise of Kirkland and its moneymaking machine has roiled the world of Big Law.
We’re also reading . . .
Chart of the day
Germany and Italy are facing calls to move their gold out of New York following Trump’s repeated attacks on the Fed and increasing geopolitical turbulence.
Take a break from the news
Is new movie F1 the last hope for originality in summer blockbusters? Hollywood is relying on sequels and reboots more than ever, writes FT film critic Danny Leigh. If Apple’s motor racing movie fails, it could be the end of the road for new ideas.
